“We both came from the fashion world, and (bags) are a saturated space,” Luo admits, but he believes “there is space for a product with both function and fashion,” particularly for $500 or less.

He and Chen both grew up in Spain, where Luo’s grandfather and Chen’s grandmother were business partners in one of the country’s most successful Chinese restaurants. Wu, who studied at Central Saint Martins and Parsons School of Design, has worked for Alexander Wang and Marchesa, among others. Luo’s family was involved in handbag manufacturing, and he has a corporate finance background. He and Wu reconnected in New York and founded Terracotta Partners, a boutique sourcing agency for emerging brands, to merge their skills, and then Caraa, which combines their first names.

Caraa spent the larger part of 2014 interviewing 500 customers of Equinox health clubs. One of their most key findings: That 78 percent of women interviewed carry more than one bag — a purse, and a backpack or duffel for the gym and the day’s heavier items.

“It needs to really fit her lifestyle,” Wu notes. “Handbags say so much about women — it’s her tool bag.”

It’s Wu’s job as the chief creative director to determine how to create a product that will marry appealing aesthetics with high functionality, outclassing its clunkier competitors that simply slap a logo on a duffel and call it a day.

The Caraa line is based on several evergreen styles that are refined and produced in different materials. The Studio Bag can worn three ways: as a cross-body bag, satchel or backpack. The digitally native brand works with hundreds of social media influencers who provide feedback, as does the ecommerce site, which generates the majority of sales.

“We lead with a kickass product, instead of leading with ‘storytelling’ or fancy marketing,” Luo says. “We work with customers to find out what their needs are, then prototype the hell out of them.”

No surprise that Athleta, the athletic and, increasingly, athleisure arm of Gap Inc., came knocking.

Earlier this month, Caraa rolled out four styles made of buttery neoprene and waterproof nylon, ranging from $68 to $118: a convertible pouch; a convertible backpack; an Everyday Tote with a 15-inch laptop pouch; and a more traditional tote bag.

“Honest prices are very important for the Millennial,” Wu says. “A lot of luxury brands overcharge.”

The duo says the collection is the start of an exclusive partnership with Athleta, and consider it “a natural fit because the Athleta and Caraa women are one and the same: powerful and inspirational everyday heroes.”

Laura Compton is the Sunday Datebook Editor, overseeing the section’s arts and entertainment coverage. She began her career at The Chronicle in 1998 as a copy editor in the daily Datebook, and since then has worked as an assigning editor, copy editor and writer for the Living, Chronicle magazine and Food sections, and for the past 10 years as Style Editor. Laura introduced coverage of the Bay Area’s independent fashion design and retail scene with features like Window Shopping, #SFStyle and the former SFUnzipped blog on SFGate. A Washington state native, she attended Mills College in Oakland and loves experiencing and finding ways to cover Northern California’s unique arts, culture and lifestyle.